Ayala company cites force majeure on petroleum drilling delay
Ayala-led upstream petroleum company ACE Enexor Inc. is seeking the Department of Energy’s (DOE) imprimatur on the declaration of a “one-year force majeure period” to provide leeway for the unforeseen delays in the company’s oil and gas drilling timetable.
During the company’s annual stockholders’ meeting, ACE Enexor Chairman Eric T. Francia noted there had been drawbacks brought about by the Covid-19 pandemic that snagged the initial well drilling activity being lined up by the company at its Service Contract (SC) 55 prospect in Northwest Palawan basin.
“Enexor was not spared from the impact of the pandemic, which has delayed our preparations for the planned drilling of our service area. We have sought a one-year force majeure with the DOE,” he stressed.
ACE Enexor President and COO Raymundo A. Reyes emphasized that the unforeseen delays in their targeted drilling activity had been mainly due to mobility restrictions and potential supply chain disruptions.
“Should the force majeure be granted, the SC-55 venture will continue to exert best efforts to deliver the obligatory well as soon as it is reasonably practicable,” Reyes stated.
As it is, Francia indicated that the company is now undertaking “definitive drilling planning” by the second quarter of this year; and the actual drilling on their targeted first well to be executed next year.
“Our company remains focused on its commitment to drill a deepwater well in the SC 55 block in 2022,” he noted.
Additionally, Reyes stipulated that their corporate vehicle Palawan 55 has “completed specialized geophysical studies focused on Hawkeye-1 gas discovery and two candidate drilling targets.”
The initial drilling preparations carried out by the Ayala firm, he specified, included project execution plan, rig market survey, tendering for long-lead drilling equipment and supplies, as well as preliminary well budgeting.
Reyes further qualified that the SC 55 consortium has already “selected a prospect to be the subject of the definitive well planning phase.”
“Preparation for a well drilling proposal for the exploratory well is underway,” he said; emphasizing that such consists of “comprehensive technical documents that details the plan for constructing the borehole and evaluating the rock formations and fluids that will be encountered in the subsurface.”
Reyes added that once they secure the DOE’s go-signal on the proposed one-year force majeure declaration, “Palawan 55 will commence the tendering process for the required drilling rig, major drilling equipment and supplies, and oilfield services.”
Francia pointed out that so far, “the signs in the first quarter of 2021 are promising;” with him qualifying that “oil prices have rebounded to pre-COVID levels and drilling activities, particularly in the region, are slowly picking up.”
SC 55 is a petroleum block straddling deep waters in Palawan basin and covers an area of 9,880 square kilometers. Based on preliminary data, prospects at the block are seen to potentially yield mainly gas, hence, interest-holders are looking forward to helping build up the country’s future gas requirements.